Correlation Between Shelton Emerging and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Meridian Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shelton Emerging and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Meridian Growth Fund, you can compare the effects of market volatilities on Shelton Emerging and Meridian Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shelton Emerging with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Meridian Growth.
Diversification Opportunities for Shelton Emerging and Meridian Growth
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shelton and Meridian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Shelton Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shelton Emerging Markets are associated (or correlated) with Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Meridian Growth go up and down completely randomly.
Pair Corralation between Shelton Emerging and Meridian Growth
Assuming the 90 days horizon Shelton Emerging Markets is expected to under-perform the Meridian Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Shelton Emerging Markets is 1.06 times less risky than Meridian Growth. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Meridian Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,162 in Meridian Growth Fund on October 20, 2024 and sell it today you would earn a total of 58.00 from holding Meridian Growth Fund or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Meridian Growth Fund
Performance |
| Timeline |
| Shelton Emerging Markets |
| Meridian Growth |
Shelton Emerging and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Meridian Growth
The main advantage of trading using opposite Shelton Emerging and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Meridian Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Meridian Growth will offset losses from the drop in Meridian Growth's long position.The idea behind Shelton Emerging Markets and Meridian Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Meridian Growth vs. Invesco Porate Bond | Meridian Growth vs. Invesco Stock Fund | Meridian Growth vs. Invesco Growth And | Meridian Growth vs. Invesco Equity And |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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